Asset Management

Western Banks Step Up Expansion, Ventures In China

Vanessa Doctor Asia Editor 12 January 2010

Western Banks Step Up Expansion, Ventures In China

A number of Western banks, such as Bank of New York Mellon, are ramping up their efforts to penetrate the lucrative Chinese market, according a number of media reports.

In the case of Bank of New York Mellon, it is preparing to launch a new asset management joint venture with Chinese brokerage firm Western Securities, pending final approval, according to the Wall Street Journal.

BNY Mellon Western Fund Management Co, which will have an initial funding of CNY200 million, will be 49 per cent-owned by BNY Mellon while the remaining 51 per cent will be held by Western Securities, the news service said.

The fund's chief executive officer, Hu Bin, reportedly told journalists at the sidelines of a financial event held recently in Shanghai that the JV will likely be finalised within the first half of the year. BNY Mellon currently has 16 offices in 12 countries in the Asia Pacific region, two of which are in China.

Banks have been aggressively expanding in China over the past months as the country's growth potential presents attractive options for investors hit by the recent financial crisis.

For example, UBS, has told Bloomberg that the increasing number of wealthy individuals and families in the Mainland is expected to help double the country's annual private banking revenue from the current year. Goldman Sachs Group's local Chinese partner Beijing Gao Hua Securities has also recently announced the expansion of its wealth management business.

According to the latest Hurun Report, which releases a rich list annually, there are around 825,000 individuals whose net worths are at least 10 million yuan ($1.5 million) in China, many of whom were barely hit by the crisis. Forbes Magazine's 2009 China Rich List also reveals that the total assets of the country's 10 wealthiest individuals had grown over 100 per cent, from $52 billion to an astounding $106 billion, as affluent numbers rose from 24 in 2008 to 40 in 2009.

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